Anthony Neoh, chief adviser of the China Securities Regulatory Commission (CSRC) -- the watchdog of the country's securities industry -- said the commission has already finished drafting the rules governing the planned board and the rules have been submitted to the State Council for approval.

Old rumors still prevail in the market claiming that a number of experts and officials are still hesitant about the launch of such a board and feel that its introduction in China should be indefinitely postponed because of the performance of the model market -- the US-based NASDAQ -- has turned bearish since last year.

According to Neoh, the first applicant enterprises will be selected eight weeks after the promulgation of the rules, and the first group of companies, 30-50 in total, will be listed on the board simultaneously.

"Optimistically, the board, which is designed for small and medium-sized high-tech firms and enterprises with great potential to raise funds, will be kicked off within six months," said Neoh, adding that the board will definitely be launched before the end of the year.

And open-end funds, another hot issue on China's stock market this year, will also be launched before the end of this summer, according to Neoh.

Speaking here at the USB Warburg Greater China conference, he said the commission has already founded an advisory committee responsible for the launch of such open-end funds, a move designed to encourage a greater influx of funds into the capital market.

"The CSRC has entered the stage of selecting suitable fund companies as trial open-end fund companies," said Neoh, but he declined to unveil which company will be the earliest lucky bird.

Reacting to the reduction of State-owned shares -- a problem that has troubled the Chinese stock market for years, Neoh suggested that a reduction could not be enforced in the near future despite some companies having already began such a move on a limited scale.

The release of state-owned shares to the public has remained an issue of hot debate in China for years, but there has been no distinct progress so far, because worries prevail that the share reduction will endanger the performance of China's fledgling stock market.

Neoh also claimed that the authorizations are to finish the drafting of a new set of rules to replace the current rules implemented in 1992 to govern a smooth operation of the securities market.

"The drafting of the new rules will be finished within a few weeks," said Neoh, adding that they will strengthen supervision of a transparent information disclosure system, and senior officials of listed companies who are guilty of wrongdoing will be punished more severely.

Neoh denied that there would be an eventual merger of the A-share market reserved for domestic investors and the B-share market, which is intended for overseas investors but has had a lot of domestic involvement so far.

"Foreign involvement in the domestic share market will be based on the Qualified Financial Institutional Investors regulations," added Neoh.

(China Daily 01/13/2001)